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Many local support measures do not constitute state aid, says Commission

EU countries can stimulate investment through local public support without asking for approval if the moves will not affect intra-EU trade, the European Commission has said.23 Sep 2016

The Commission has issued guidance on state aid after it found that five public measures for local operations in Spain, Germany and Portugal were unlikely to affect trade between member states.

EU state aid rules apply when support to individual companies is likely to affect trade between member states. The high degree of economic integration across the EU means that any aid that distorts competition between companies within a member state is also likely to have an impact on intra-EU trade, but that is not always the case, the Commission said.

"Where the beneficiary of state support supplies goods or services to a limited area within a member state, and is unlikely to attract customers from other member states, there may be no effect on intra-EU trade and therefore no state aid within the meaning of the EU rules," it said.

The cases in question were: support from the Spanish government for local media in the Basque and Valencian languages; German support for the construction of sports facilities in Bavaria, and for the renovation and modernisation of infrastructure in the port of a German island with about 8,000 inhabitants; and Portuguese government funds allocated for the construction of an assisted living facility for elderly residents.

"The five decisions announced today clarify what public support measures member state authorities can implement without prior scrutiny by the Commission because they do not affect trade between member states. They complement a set of decisions taken in 2015 that already gave guidance on what types of public support does not constitute state aid. This reduces the administrative burden for EU member states, speeds up the delivery of investments, and increases legal certainty for public authorities and companies," the Commission said.

For these kinds of measures, "member states always have full autonomy to decide and invest state funds", the Commission said.

Commissioner Margrethe Vestager, who is in charge of competition policy, said: "This reflects the Juncker Commission's approach to be 'big on big things and small on small things'. It also complements the modernisation of state aid as a result of which 90% of all state aid measures can be decided by member states themselves - they no longer have to go to the Commission for approval."